Retailers put in the boot over EU import tariffs
Struggling British retailers accused the European Union of being “overwhelmingly in favour of protectionism” today as it prepared to slap duties on cheap goods imported from Asia.
Tariffs will be imposed on leather shoes made in China and Vietnam on April 7 after EU trade commissioner Peter Mandelson found evidence of “dumping” - shoes being sold to Europe at knock-down prices with the help of state subsidies.
The European Commission said it had not made a decision on the size of the anti-dumping duties, but it is thought they could be up to 20%.
The move followed complaints from 30 EU manufacturers in countries such as France and Italy who demanded measures were imposed to stop them going out of business amid unfair competition from Asia.
But the move left Mr Mandelson on collision course with retailers and shoppers in the UK worried that higher costs will increase high street prices and lower profits margins.
And it could spark a repeat of last year’s lengthy “bra wars” dispute between Brussels and Beijing over Chinese textile exports.
The latest issue meant Mr Mandelson had to balance the needs of retailers in countries such as the UK and Denmark – which outsource shoe production to Asia and buy in cheap stock – with the needs of producers in countries such as Italy, France and Spain, where shoe manufacturing continues.
The British Retail Consortium (BRC) today warned punitive measures would cause “a lot of pain” to the struggling retail sector in the UK.
BRC Brussels director Alisdair Gray also branded Italy’s demands for tariffs of 50% “outrageous”.
“We are not happy about it,” he said. “We think they the commission decided on a course of action a long time ago.
“We are opposed to the whole way the investigation has been done, but we have to accept the political reality in Europe which is that it is overwhelmingly in favour of protectionism.”
The BRC said the tariffs favoured uncompetitive European producers who opposed reform.
And in a letter to the Financial Times today, Danish economics minister Bendt Bendtsen argued that the cost to European consumers of more expensive Asian shoes would far outweigh the benefit to producers.
“For each euro gained by the EU producers from trade protection, EU consumers and user industries have to pay almost €10,” he said.
Mr Mandelson launched his investigation in July, and in an effort to avoid a repeat of the bra wars dispute with China, he is thought to have rejected demands for 50% duties and will instead propose duties of up to 20% phased in over six months.
The Trade Commission today denied it was in favour of protectionism.
“This is a question of dumping, or putting into the market goods which are produced with the help of substantial state intervention,” said spokesman Peter Power. “It is a question of unfair competition and not a question of protectionism.”
China is the world’s largest exporter of footwear and Asia already accounts for about three-quarters of worldwide footwear production. Meanwhile, shoe imports to Europe surged 700% during the first three months of 2005 as Italian shoe exports slumped 15%.
